Government Issues Zero-Coupon Bonds

The Centre, in a first move of its kind, issued Rs 5,500 crore in zero-coupon bonds for recapitalising Punjab and Sind Bank (P&SB) and allowed it to park the paper in its held-to-maturity (HTM) category at face value rather than the discounted market rate.

  • The move is seen as raising concern in the accounting fraternity and bank auditors though the banking regulator, the Reserve Bank of India (RBI), has cleared it for now after much internal deliberation.

Zero Coupon Bonds

  • It is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at ....
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